Laborsphere

New Guidance May Help Employers Avoid Significant Penalties: How to Prepare for 2014 and the New Employer Shared Responsibility Rules and Waiting Period Limitation

From our friends in the Employee Benefits and Executive Compensation Group: New guidance is available to help employers prepare for the significant new rules that become effective in 2014, including the employer shared responsibility mandate (i.e., the penalties that may be imposed on an employer that doesn’t offer certain health care coverage) and the prohibition on waiting periods in excess of 90 days, under the Patient Protection and Affordable Care Act of 2010 (health care reform).

Employers may rely on the new guidance through the end of 2014. Employers will not be required to comply with any subsequent guidance that is more restrictive until January 1, 2015 at the earliest. This is good news because it provides employers a measure of certainty about how to prepare for the 2014 employer shared responsibility mandate – particularly those employers concerned about what must be done to avoid significant penalties for failing to provide coverage, or for providing unaffordable coverage.

Click here to download a summary of the current rules to help determine who is a full-time employee for purposes of the employer shared responsibility mandate and the 90-day waiting period limitation, as well as suggested steps employers should take now to prepare for 2014.

PEPping Up the Economy and Employers

On October 26, Governor Tom Corbett (R-PA) signed into law the Promoting Employment Across Pennsylvania Act (PEP) (House Bill 2626). This law is touted as an attempt to create new jobs in Pennsylvania and promote economic development.

What does this mean for thousands of Pennsylvania employers? If you are able to create at least 250 new jobs in Pennsylvania within 5 years (with 100 of the new jobs created within the first 2 years), you will be eligible to retain 95% tax witholdings for the persons employed in the new jobs. Under the Act, the employer may select to remit all of the personal income tax witheld from employees then receive a rebate of the tax from the Commonwealth.

Job creators grow while growing the economy in the process. These tax savings may provide opportunities for employers to further increase their number of employees beyond the initial 250 or reinvest in other areas of the business. Presumably, the Commonwealth benefits as well. More persons employed in the Commonwealth lead to economic growth through purchasing power and sales tax revenues.

There are restrictions and critiques. Non-profit entities, religious organizations, utilities, restaurants/bars, gambling establishments, retail stores, and education or public administration offices need not apply. Plus, an open question remains whether the program amounts to an employee paying an employer for his/her job.

To take advantage of this opportunity, employers must enter into an agreement with the Department of Community and Economic Development (DCED). Any interested employer should move quickly because the ceiling for the program in Pennsylvania is $5 million per year. This Act expires January 1, 2018.

Extreme Weather, Natural Disasters and Personnel Issues

What happens when a business is temporarily closed due to extreme weather? What about overtime as employees try to catch up on work? These are questions that employers on the East coast find themselves asking in the wake of Hurricane Sandy. William Horwitz, counsel in the Florham Park office, has authored a client alert to answer these and other questions that employers are now faced with.

Read the full alert.

New Jersey Employers Required to Post and Distribute Notice of Gender Pay Equality

On September 21, 2012, New Jersey’s Governor Chris Christie signed Assembly Bill No. 2647 (A-2647) into law, supplementing the New Jersey Equal Pay Act which will take effect on November 19, 2012, and applies to all New Jersey employers with 50 or more employees. A-2647 imposes several new obligations on employers, who must conspicuously post the notification in an accessible and conspicuous place in English, Spanish and any other language spoken by 10% of the workforce within 30 days of the time the Commissioner first issues the form notice.

The notice must detail employees’ rights to be free of gender inequity or bias in pay, compensation, benefits or other terms and conditions of employment. In addition, the notice must be given to new employees upon hire and to any employee upon request. Employers must redistribute the notice annually and obtain a written acknowledgment that the employee has read and understood the notice. Distribution of the notice may be made by paper or electronically via email or a website, “if the site is for the exclusive use of all workers, can be accessed by all workers, and the employer provides notice to the workers of its posting.”

However, the law does not require posting or distribution on the effective date, November 19, 2012, or even within 30 days of the effective date. The posting and distribution requirements will not be triggered until the Commissioner of Labor and Workforce Development issues the notification by regulation, the notice has passed through the regulatory approval process and is published in the New Jersey Register. This process will likely take several months.

NLRB Signals Intent To Scrutinize Facially Neutral Handbook Policies

The Acting General Counsel of the NLRB is apparently rummaging through handbooks and policy statements to charge nonunion employers with unfair labor practices for enacting seemingly innocuous rules that could conceivably be read as interfering with the right of employees to engage in protected concerted activity. And as can be seen from the Board’s recent opinion in Karl Knauz Motors, Inc., 358 NLRB No. 164 (2012), the current Board majority has apparently bought into that misguided theory.

Under existing Board law, employers violate Section 8(a)(1) of the Act by maintaining work rules or policies that “would reasonably” be construed by employees as prohibiting or chilling their right to discuss or object to the terms and conditions of their employment. In this case, the car dealership had a seemingly innocuous and facially neutral “Courtesy” Rule in its employee handbook requiring employees to be “courteous” and “polite” to customers, suppliers and co-workers:

(b) Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

The rule would reasonably appear to require employees to refrain from being disrespectful and from using language which would reflect poorly on the Dealership when interacting with customers and suppliers, or with one another in the presence of customers and suppliers.

Although the rule was not applied to discipline or discharge any employee, the Acting General Counsel nevertheless charged the employer with an unfair labor practice for maintaining the rule, and the Board majority agreed. Citing its recent social media policy decision in Costco Wholesale Corp., the Board noted that there was no protected activity disclaimer in the handbook and held that the “Courtesy” Rule is unlawful based on the strained conclusion that the Dealership’s employees would reasonably assume that they had been disrespectful in violation of the rule if they objected to or criticized anything concerning their working conditions. The reliance on Costco would appear to be misplaced, however, as that case involved a rule prohibiting employees from posting disparaging comments about the employer on the Internet. In this case, the Board’s majority improperly reads the “Courtesy” Rule as if the sentence prohibiting disrespectful conduct and profanity was a stand-alone requirement as in Costco, ignoring completely the context in which that sentence is part of the overall expectation that employees be courteous to customers and one another in order to maintain the Dealership’s good reputation and image. Context matters, however, and in this context it appears the Board will find rules to be unlawful if they “could conceivably” be read as chilling protected rights, as it strains credulity to think that employees “would reasonably” read a rule addressed to courteous behavior towards customers as interfering with their right to object to working conditions. Because the Acting General Counsel will continue to prosecute nonunion employers for handbook policies that “could conceivably” be read as chilling protected activity, employers need to review and modify their policies to avoid facing unfair labor practice charges.